Ocean City drawing fewer who stay More are coming to town looking for brief getaway

Trend gives tourism a lift

Condominium sales slipped nearly 10% in '95, may rebound

July 07, 1996|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Most Ocean City beach-goers are seeking temporary getaways rather than permanent spots in the sun -- a trend that last summer boosted tourism but held back the real estate market.

In 1995, more people than in recent years crossed the Bay Bridge, spent money in shops, stayed at hotels and rented condominiums, according to a real estate consultant's annual portrait of the resort town's economic health.

But sales have remained relatively flat, the June analysis by Lipman Frizzell & Mitchell shows.

Sales of condominiums -- which account for the bulk of the town's real estate transactions -- dipped nearly 10 percent in 1995 compared with the previous year, with 1,080 one-bedroom, two bedroom and three-bedroom units selling.

"The resort is popular and keeps gaining in popularity, but for buyers of real estate, you still have an economy where people are afraid to spend the kind of money to buy a second home," said David H. Brooks, a partner and appraiser with the firm.

At the same time, the average sales price increased 3.2 percent, to $100,133, the consultant said.

Brooks attributed the increase in average sales price to the fact that fewer bayside and bayfront units were sold than the typically higher-priced oceanfront and ocean block units.

In 1995, 605 units sold on or near the ocean, while 475 sold on the bayside.

The market in Ocean City, as in many resort areas, took a plunge after 1986 tax law revisions

limited property investments as tax shelters. On a year-to-year basis since 1991, condo sales have either dipped or remained steady, the Lipman Frizzell statistics show.

"If consumer confidence grows, the economy continues to recover, and interest rates stay low, the condominium market will begin to pick up," the report says. "The national economy will have its greatest impact on Ocean City by virtue of overall consumer confidence, as it is the key to any positive change in sales."

But some brokers said they have begun to see a turnaround this year.

"All in all, even with the bad weather, we're selling more property in '96," -- largely condominiums -- said Bob Jester, an associate broker and appraiser with Moore Warfield and Glick. "I guess people just decided this is the time they want to buy."

For one thing, buyers are finding they can get better deals on property than they did a year ago, Jester said.

"The appreciation is just not there anymore" -- largely an effect of investors' pulling out of the market in the mid-1980s, he said.

Rather than selling properties on their investment potential, brokers said, they sell the value of owning a vacation home or place to retire near the ocean and other recreation, such as golf. Several golf courses are planned or under construction.

The lure of beach and recreation has proven strong for buyers at Ocean Pines, a waterfront community three miles west of Ocean City across Isle of Wight Bay now selling homes for the final 620 acres to be developed. Sales there have helped boost the single-family homes market in Worcester County, brokers said.

"The Ocean Pines market is extremely strong," said Terry Hough, a managing partner with O'Conor, Piper & Flynn Realtors in Ocean City. "It's a combination of second home [buyers] and they're also retirees, but also a lot of future retirees, people buying now with the intention of retiring later. You get a lot of value for the dollar."

Pub Date: 7/07/96

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